"On Labor Day, the nation's labor pains grow"

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In an op-ed published in The Tampa Tribune on Labor Day, Public Notice’s Executive Director, Gretchen Hamel, argues that the boom in government jobs is not the way to economic recovery.

The number of people currently unemployed is almost double what it was at the start of the recession in December 2007. Eleven states currently report unemployment rates over 10 percent. And these figures do not account for the millions who have given up looking for work, or settled for part-time jobs or jobs for which they are highly overqualified.

One notable area that has blossomed: government. Since the recession began, the federal government has added 262,000 jobs. At a time when everyone else is being forced to tighten their belts and make painful budget cuts, many are perplexed by the fact that government continues to grow.

Currently, the government workforce is 22.5 million strong. That means 22.5 million workers are relying on American taxpayers – not the goods-producing private sector – for their paychecks.

According to new data from the Bureau of Economic Analysis, average compensation (wages plus benefits) for a civilian federal employee is $123,000; for the private sector the same figure is $61,000. Even the most conservative estimates (adjusting for differences in skill level and experience) suggest that private sector employees have to work for 13.5 months to make the same amount that government employees make in 12 months.

While government seems highly confident in its decision to grow, the business world is not. Businesses are currently holding on to an estimated $1.8 trillion in cash reserves – money that is desperately needed to drive innovation and job creation. Why? In a word: uncertainty.

These enormous cash reserves are largely a result of uncertainty and lack of confidence about policies coming out of Washington. All of the unknowns surrounding economic policy (e.g. which taxes will increase and whether stimulus money will continue to distort the market) have left businesses unable to plan – to decide where or when to invest, whether to expand and hire. So they wait, as does our recovery.